Stealth Voucher Bill Offers Tax Credits to Sponsor’s Husband’s Insurance Company

As she promised in committee last week, Senator Phyllis Heineman (R-13/Sioux Falls) voted yesterday against House Bill 1182, the funding for historic 20% pay raises for South Dakota teachers. Senator Heineman will ask House Appropriations this morning for some sour-grapes solace, passage of Senate Bill 159, her reheated stealth voucher plan.

SB 159 unconstitutionally launders public money to fund private school tuition by giving insurance companies credits on their premium and annuity tax for granting “scholarships” for private K-12 school tuition to low-income students.

It seems odd that Senator Heineman would single out insurance companies as the only entities eligible to participate in her scheme to drain kids and money from the public schools. Statutorily, SB 159 is a simple plan, since insurance companies have a convenient state income tax from which we can make these tax expenditures. But why not include banks in the plan? Banks pay their franchise tax (South Dakota has corporate income taxes; we just don’t dare call them that), which would be as easily creditable as the insurers’ premium and annuity tax. Businesses of all stripes pay property tax; Senator Heineman could write a levy reduction into SB 159 for any scholarship-granting business. Senator Heineman could even create a sales tax exemption card: write a check to a private school, and the state sends you a little punch card allowing you to make X-dollars worth of purchases without paying sales tax. (Remember, SB 159 can’t just write private school scholarship donors a check, because then the unconstitutional expenditure of public dollars for religious education would be far too obvious.)

An eager reader offers a simpler explanation for Senator Phyllis Heineman’s singular favor to the insurance industry:

D. Greg Heineman, president and owner, Williams Insurance. Screen cap,, 2016.03.02.
D. Greg Heineman, president and owner, Williams Insurance. Screen cap,, 2016.03.02.

D. Greg Heineman, founder and owner since 1972 of Williams Insurance, past president of the Sioux Falls Catholic Schools Foundation, past chairman of Advanced Gifts for the O’Gorman High School Building Funding Drive, and 43-year husband of Senator Phyllis Heineman.

Senator Phyllis Heineman pitches her bill to give her husband and herself an opportunity for thousands of dollars in state tax credits this morning at 8 a.m. in Large Conference Room 1, third floor of the Capitol in Pierre.

21 Responses to Stealth Voucher Bill Offers Tax Credits to Sponsor’s Husband’s Insurance Company

  1. Shirley Moore

    Somebody told me you get in the legislature because you have a bone to pick or you want to feather your own nest — or both. Kinda looks like it.

  2. I have several bones to pick. One of them is the kind of corruption self-interested legislators like Phyllis Heineman have not just countenanced but, as seems the case with SB 159, sought to cash in on.

  3. Steve Sibson

    Cory, you are going along with that corruption because the teachers have been bought off.

  4. Happy Camper

    Yeah he wants to feather his own nest give me a break. A couple good things have happened. The education bill and the governor vetoed the trans bill. Working with Republicans is necessary and they can do the right thing.

  5. Eve Fisher

    As we all know, “working with Republicans” is generally code for “let them grab what they can from the cookie jar.” $120 million from EB-5, $5 million from Gear Up. What’s a few thousand from state tax dollars for an insurance company, right? Back to writing my legislators…

  6. Happy Camper

    I know nothing of the sort Eve. Two parties can find common ground on many issues, sometimes they can’t. People are dead tired of a dysfunctional government that can’t work together.

  7. Jake Cummings

    Definitely appreciate the additional discussion regarding this legislation, Cory. I tried to play the devil’s advocate before and see what reason(s) Sen. Hunhoff might have for supporting the bill, but the ledger seems unbalanced, and current supporters would have a substantial burden of proof to have my unwavering support (as if that matters)

  8. Maybe these vouchers can help O’Gorman recruit better athletes and turn them into a feeder system for the Skyforce (Mike Heineman is their son). It’s not surprising that she didn’t vote for the teacher pay bill as her children attended the Sioux Falls Catholic School System, but yet on her page she gives “props” to the wonderful schools

    “In 2014 she ran on the platform that wanted all students prepared for college opportunities.”

    In the two years since she was elected the graduation rate was 83% in 2013 and 83% 2015…..This was one of things she also cited that was important to improve. Also being prepared to go to college and being able to afford college are two different things. 3 out of every 4 students who go to college go back after the first year, the others leave for a variety of reasons. So far she gets a negative grade on her education as she has done nothing to solve the issues that she stated in 2014.

    “Eliminate South Dakota’s labor shortage in both highly skilled and science & technology professions to continue to grow South Dakota’s economy.”

    Low wages continue to drive people out of this region and factor that with a not so low cost of living here. Low taxes only get you so far as 20 states are cheaper to live in and most of them pay better then South Dakota. Why live here, when you can move out of state to make more money and spend less on the basics. This is another failing grade as she has not attracted new professionals in the state. Instead the state is digging into the 55+ labor pool and depending on them for the future. We are way ahead of the silver tsunami that will potentially hit the rest of the nation by 2020. We were already there in 2008.

    “Efficiently manage our Medicaid spending to take care of our most vulnerable South Dakotans and yet not crowd out our other State priorities. With 116,000 currently on Medicaid & CHIP (80,000 of those are children), these medical services account for the fastest growth in State spending.”

    Instead of pushing for inclusion into the federal program, she has not pushed for medicaid expansion based on federal dollars. This isn’t surprising as medical spending in a state that is employing an again workforce is natural.

    “Enhance citizen’s safety and reduce prison spending with programs that hold criminals more accountable.”

    SB 70 which she was a primary sponsor on. When you look at what she is taking credit for in 2015 is a decrease of 65 people in the prison system. Interestingly though if you look at the numbers in 2012 and 2013 you will see a similar drop prior to the adoption of this new policy and you will see another drop in 2006-2008. Is this bill she sponsored really working. At this time it would suggest that we are currently in a normal cycle of increasing and decreasing. Also after 2008-9 the DOC took a pay cut and oddly enough crime numbers went up.

    In all the question is what has she done other then trying to fund her private school of choice.

  9. Steve, I resent your effort to pull us off topic and reject your accusation that I am going along with corruption. Funding competitive pay for teachers is not corruption; it is paying teachers for the work they are doing instead of covetously hoarding their rightful pay to ourselves as we steal their labor. SB 159 is corrupt because Senator Heineman is coveting public dollars and trying to steal from our public schools to enrich her own business.

  10. Steve Sibson

    “Two parties can find common ground on many issues”

    Increase taxes and fight over who gets it. The bigger the pie, the more chances for corruption. Cory, you need to face the fact that simply adding taxes for the teachers was bad enough. But to admit that in order to get that money, we had to also buy off the commercial interests with property tax reductions is just as questionable as this BS. Sad that moral relativism allows you justify it.

  11. Eve Fisher

    Cory, some people will never grasp the concept that, in order to have a functioning society, everyone has to cooperate and contribute and yes, pay taxes! to have things like roads, bridges, sewer systems, schools, teachers, public health systems, public utilities, etc. Let it go.

  12. What are the odds that the Sioux Falls Catholic Schools Foundation meet the criteria of “an organization providing educational scholarships to certain students.”

  13. What is a bone to pick? Is that like not accepting the status quo? Oh how I wish there were more bone pickers in the legislature when all the corruption started to come to a head.

  14. I’m with you, Jerry!

  15. No public funds should directly or indirectly go to private schools. This is a decision a family makes and they ought to pay for it themselves.

  16. Roger Cornelius

    If Sibson were ever elected to the state legislature he would be the first one digging in the state’s pocket looking for loose change.

  17. Exactly Mr. Winegar, if you want your kid to wear a uniform and go to the private school, good for you. Get your checkbook out and don’t look at mine.

  18. Roger—another strange moment: imagine Steve Sibson and me together in the South Dakota Senate.

  19. House Appropriations took testimony but deferred SB 159 to next Monday. Patrick Anderson’s article nicely summarizes the arguments offered for and against but makes no mention of Senator Heineman’s husband’s job and financial interest in this stealth voucher plan.

  20. Roger Cornelius

    Cory and Sibson in the legislature would be fun, you could actually come face to face with insanity.

    This bill is a perfect example of South Dakota cronyism, republican are so confident in their greed that they don’t even try to hide it.

  21. Bobby Kolbe

    I am always suspicious of laws
    That allow individuals,business, corporations, or other entity to, as my farmer father would say,”suck off the government T**t”.
    He was earthy, But HE WAS RIGHT!